It already owns a 26pc stake in supermarket giant Sainsbury, 24pc in
Canary Wharf owner Songbird, as well as significant holdings in the
London Stock Exchange and Barclays Bank.

But in a surprise announcement over the weekend, Qatar
Holding, the state's investment arm, added Harrods to its long list of
UK interests.

With a £1.5bn price tag, it is the biggest deal in British retailing since the £7bn takeover of Alliance Boots in 2007.

The shift to taking outright control is a step change for the
emirate which, despite failing to buy Sainsbury in 2007, has been
content with minority stakes.

It marks a more aggressive shift in strategy and has sent a shiver through the markets.

The City is closely watching Qatar's minority holdings and
trying to second guess its next move. It wants to know whether its
fortune is sustainable and why it's filling its shopping trolley over
here.

The former is easy to answer - Qatar's wealth comes from
energy. It is sitting on the world's biggest gas field and is leading
the world as a supplier of LNG - liquefied natural gas.

With a population of just 1m Qatar has the second-highest GDP per capita in the world.

But while it was already wealthy from oil, advances in
liquefying natural gas has made transportation easier and opened up new
markets. It has invested huge amounts in gas but has yet to reap
commensurate returns.

The reason it is over here, along with other overseas
predators, is the weakness of the pound, the UK's liberal markets and
the depressed markets making some stocks cheap.

Also the current emir, Sheikh Hamad bin Khalifa Al Thani, was
trained at Sandhurst and his son was sent to a British boarding school.

The family firm, Qatar Holding, is one of the investment arms of the Qatar Investment Authority, which was set up in 2005.

So now we know the attraction of the UK, what's behind Qatar's recent flurry of investments?

Oil and gas accounts for 62pc of Qatar's GDP but it has very little else.

Just like Dubai, by investing in other sectors such as retail,
stock exchanges, tourism and property, it can diversify its oil
revenues into other areas - new revenue streams for when supplies run
out. Richard Thompson, editorial director of the Middle Eastern
Economic Digest says it also wants to build brand Qatar: 'Investments
in things like London Stock Exchange and Harrods, support this drive.

'Traditionally Qataris have taken a cautious approach to
investments, taking minority stakes in low-risk, blue-chip companies.
But throughout the recent oil boom this was accompanied by the easy
availability of cheap credit.

'We have seen several funds from the region now taking a much more aggressive approach.'

Sovereign wealth funds have started borrowing substantial amounts of debt and are beginning to look like private equity firms.

While Qatar previously failed in its bid to buy Sainsbury its
Harrods acquisition will bring back nightmares from 2007 that it is
back on the acquisition trail.

Previously Qatar Holding has said it is happy to be the largest shareholder and the City seems to believe it for now.

Shares in Sainsbury (down 2.1p to 323.3p), which reports its
fullyear results tomorrow, do not seem to have reacted, slipping 3.81pc
over the past five days.

A source familiar with Qatar Holding said: 'They are active and supportive shareholders.'

But the big question is whether it is about to make that leap from investor to predator.